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Sunday, May 31, 2020

You’re Unemployed and You’re Unemployed and You’re Employed… Here’s how it Breaks Down

Image by Gerd Altmann from Pixabay
This story from Indexer

The most visible job losses in the coronavirus crisis have come in the industries and occupations that shut down first and can be seen from the street, such as restaurants, bars and entertainment venues. But, quietly, tens of thousands of office workers, salespeople and their managers have been let go. A restaurant or construction supply company can’t do much business with all the restaurants and sites shut down. We will look at unemployment claims by occupation below.

But first, what happened last week? As expected, Washington State saw a big jump in first time claims for unemployment benefits. This was anticipated, as a new rule had just come into play that would provide benefits to new classes of workers who had been excluded from the system: self-employed and gig workers, and those with short work histories. With people in these categories now eligible, there was a surge of new claims, as shown in Figure 1. A large share of these new claims appear under the “not classified” industrial designation, indicating that perhaps the claimant was loosely associated with the conventional workforce.

As Figure 1 and previous reports show, the distribution of claims is very uneven across industries. There is also a wide variation across occupations. The State Department of Employment Security (ESD) provides data on first-time claims by Standard Occupation Classification, and Figures 2 and 3 show how the first time claims since March 1 have fallen across these classifications.

Perhaps surprising is the number of people in management positions who have filed claims for unemployment compensation. Of the over 53,000 managers who filed a claim, half fall into five categories: operations, food service, sales and marketing, transportation and construction. Managers in business service occupations saw far fewer layoffs. Layoffs of managers, while risky (they may not return, and take their knowledge of the firm to a competitor) makes financial sense, given the high salaries shown in Figure 3.

Figure 3 shows how uneven an impact the coronavirus crisis is having across occupations. Those occupations that can shift to working from home, such as computer science and legal, have seen far fewer claims, while those that must be curtailed to avoid human contact, such as construction, personal care and factory production, have seen very high layoff numbers and percentages. The slowdown in economic activity across the board is reflected in the large numbers of office, maintenance and transportation workers who have been let go. Healthcare practitioners and support workers have been laid off as hospitals have stopped elective surgeries and other services deemed non-essential.

As the economy slowly opens, our ability to track workers as they return to their jobs will be limited. ESD reports “continued claims” by sector and occupation, but changes in continuing claims can mean a lot of things and do not necessarily signal workers returning to their old job or even occupation. On May 20, ESD will release April employment figures, covering the first full month of the shutdown. Any improvements in the employment picture that take place in May will be reported on June 17.

Every observer of the economy seems to have an opinion on how recovery will unfold an the degree to which sectors will be permanently changed. But there are so many variables and interactions that any projections seem like little more than guesswork. Normal patterns of recovery just won’t apply. For example, the use of furloughs and the availability of generous unemployment benefits changes the sense of urgency and the willingness of people to take the best job that come along or perhaps to shift sectors.

Unfortunately, there is no real-time data on employment trends and very little even in the short term. Changes will be happening far faster than they can be reported on. The social scientists will be scrambling.

This story originally appeared in Puget Sound Indexer

Michael Luis
Michael Luis
Michael Luis is a public policy consultant who has been wrestling with housing, growth and economic development issues around Washington State for over 30 years. He is author of several books on local history and served as mayor of Medina.

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